Tax Simulation Research Paper

The pool cost the petitioner over $19,000, and we cannot accept his contention that such amount was spent primarily for therapy for his leg in view of the limited need for such therapy and the alternatives which were then available.

Parent Corporation owns 85% of the common stock and 100% of the preferred stock of Subsidiary Corporation. The common stock and preferred stock have adjusted bases of $500,000 and $200,000, respectively, to Parent. Subsidiary adopts a plan of liquidation on July 3 of the current year, when its assets have a $1 million FMV. Liabilities on that date amount to $850,000. On November 9, Subsidiary pays off its creditors and distributes $150,000 to Parent with respect to its preferred stock. No cash remain to be aid to Parent with respect to the remaining $50,000 of its liquidation preference for the preferred stock, or with respect to any common stock. In each of Subsidiary’s tax years, less than %10 of its gross

Ann paid $500 for her books and supplies and she incurred living expenses of $7,400.

Depreciation is the loss in value of an asset / building over time due to wear and tear, physical deterioration and age. Depreciation is treated as an expense and is a line item on your income statement but must be applied only to the building and not the land (since land does not wear out over time). You will be able to depreciate the building over a period of 39 years using the Modified Accelerated Cost Recovery System (MACRS). IRS Publication 946 contains the rules and guidelines governing depreciation of non-residential or commercial property.

AmeriSouth argued that cost-segregation study allocates $65,381 of Garden House's depreciable basis to “site preparation and earthwork,” depreciable over 15 years as a land improvement is allowable because it is a “site development,” but nowhere does it describe what work is included in this category. On the other hand, the Commissioner's expert claims that work papers show the expenses relate to the initial clearing and grubbing (i.e., tree removal) of the land which occurred before the apartments' construction in 1970.

D. Contribution of a building with a FMV of $200,000, a mortgage (assumed by the corporation) of $100,000, and a basis of $125,000.

John has income derived from a business and as such the gross income will be taxable (Code §1.61-3(a)) (Tax Almanac, 2005). This $300,000 taxable income will pass through to his personal taxes and is subject to self employment tax since he has an LLC. He

(TCO D) A residence in Brevard County has an assessed value of $150,000. Its owner qualifies for an old age exemption of $10,000 and a homestead exemption of $20,000. The property tax rate is $5 per $100 AV. What will be the property tax bill on this property?

1. For the Tax year 2004, is SK eligible to switch from the accrual to cash method of accounting under Rev. Proc. 2001-10?

Mr. Alexander is a gentleman that is looking to build his investment portfolio through residential real estate. He is looking at investing in a 4-plex in a historical district located within Boston, Massachusetts. The building is located on Revere Street and has a listing price of $350,000. Mr. Alexander is evaluating the possible commitment to understand what he stands to gain from the annual cash flows while at the same time understanding the risks involved. The subject property is located within a historical district and is not yet capable of housing tenants. Property will require significant improvements prior to inhabitation. Client

The allocations of bases were then applied to the potential sale of the property totaling $1,200,000. This creates a sale price of $809,715 for the business and land and $453,295 for the house. This followed Publication 551 which states that you take the fair market value of the particular asset given up divided by the total fair market value at the time of purchase, then times it by the sale price. This will give you what to allocate for each asset in order to calculate your gain. If you were to sell the business, home, and land, there would be a total taxable gain of $926,000 consisting of $349,785 attributable to the house and $576,215 attributable to the business before any tax effects. Our recommendation of selling the house with an exclusion and making a non-taxable like-kind exchange for the business will greatly reduce the taxes on the transaction. If the house is sold, it will be eligible for a $250,000 exclusion on the taxes of the sale, which will result in total taxable gain of $102,785, after the depreciation recapture for the home office. The like-kind exchange for the business will involve trading the business for another business, which means you could buy a bed and breakfast without making a separate transaction and you will defer taxes. The tax payment will be deferred until the traded property is disposed of. The total

Facts: Murray Taxpayer was previously employed by a company who was illegally dumping chemicals into a river. Murray had knowledge concerning these illegal activities of his employer and made an ethical decision to report this to the Environmental Protection Agency. Upon inspection, the Environmental Protection Agency determined that Murrays employer was in fact illegally dumping and was appropriately fined for the charges. Murray’s employer reacted to his whistleblowing by firing him and making deliberate efforts to prevent Murray from gaining employment elsewhere. Murray then sued his former employer for damaging

1. All distributions (excluding reasonable salary) to Paula and Mary will be taxed as dividends to them. And the corporation could not deduct this part of distribution.

This case involves an investigation of the factors that affect the sale price of Oceanside condominium units. It represents an extension of an analysis of the same data by Herman Kelting (1979). Although condo sale prices have increased dramatically over the past 20 years, the relationship between these factors and sale price remain about the same. Consequently, the data provide valuable insight into today’s condominium sales market.

Her primary objective is to maintain her current life style and take care of herself in case of any disability. Her major concerns are related to her extensive traveling and social life style .The second concern related to her own and rental property. She wants to move condo after selling these properties, the prices of condo in her neighborhoods fall between $1 million to $1.25 million which she is considering, but she is indecisive to sell her own property. Her principle house is currently estimated at $850,000 and three rental properties values are now $ 2.3 million. The total maintenance cost for principal and rental properties are $10,000 and $25,265 respectively. Besides these properties she has great savings and income, she is receiving $54,120 annually from these three rental properties, which are her major source of income and the other source of income of her CPP $10,100 annually which included her survivors and retirement benefits and payments from Registered Life Annuity, RRIF and a survivor pension from her husband employment. In addition she has investments in RRSP, non registered accounts, TFSA and federally controlled LIF. She also have shares certificates which has sufficient value